Standard Gears Produces Lawn Mower Gears How Much Is the Direct Material Price Variance?
A) $465

Multiple Choice

Standard Gears produces lawn mower gears. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system:
$\begin{array}{ll}\text { Actual Data }&\text { Budgeted and Standard Data }\\\begin{array}{|l|c|}\hline \text { Produced } & 12,400 \text { units } \\\hline \text { Materials purchased } & 4,650 \text { lbs. for a total cost of } \$ 32,550 \\\hline \text { Materials used } & 4,700 \text { lbs. } \\\hline \text { Labor worked } & 7,460 \mathrm{hrs} \text {. costing } \$ 79,822 \\\hline \text { Actual overhead } & \text { Fixed: } \$ 84,800 \\&\text { Variable } \$ 36,100\\\hline\end{array}&\begin{array}{|l|c|}\hline \text { Budgeted units } & 12,500 \text { units } \\\hline \text { Budgeted materials } & 0.401 \mathrm{1b} @ \$ 7.10 \text { per } 1 \mathrm{~b} . \\\hline \text { Budgeted labor } & 36 \text { minutes @ } \$ 11.00 \text { per hour } \\\hline \text { Budgeted variable overhead } & \$ 35,625 \\\hline \text { Budgeted fixed overhead } & \$ 85,500\\\\\hline \end{array}\end{array}$
How much is the direct material price variance?

A) $465 favorable
B) $1,846 favorable
C) $470 favorable
D) $2,201 favorable